Renter’s Insurance: Trust Me, You Need It

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renters insuranceAt the time that Hurricane Sandy hit New York City – a city notorious for having a high population of renters – only about a third of residents had renter’s insurance. I know, I was pretty shocked, too. I mean, sure, it’s not every day that a massive hurricane hits the Big Apple, but still. Only a third of these city slickers were worried about protecting their stuff?

Apparently, New Yorkers aren’t the only ones overlooking the importance of renter’s insurance. Only around 40% of American renters have renter’s insurance, and a quick (and obviously unscientific) poll of my friends revealed worse statistics. Of the six who still rent only one has renter’s insurance. Come on, people! Get with the program!

I consider renter’s insurance to be a must-have product. It protects my belongings against theft or damage (in a storm or some other kind of catastrophe, like a fire or a pipe bursting) and it protects me in the event that someone is injured while visiting me in my apartment. What’s more, if my car is broken into my renter’s insurance policy will cover any personal property that’s in my vehicle. Many policies even cover the cost of temporarily relocating if your apartment is so damaged by disaster that you can’t occupy it for a period of time.

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But the best thing about renter’s insurance is that it’s cheap. Most policies run only $10-$25 per month for all of the features listed above.

So why do so few people have renter’s insurance? Probably because, unlike homeowner’s insurance, it’s optional. Very few landlords require renters to carry insurance since they have their own policies to cover the physical property the renter resides in. A lot of people look at renter’s insurance as another expense that they don’t want to pay because it’s not strictly necessary. But in the event of a break-in, a flood, or a slip-and-fall accident, renter’s insurance can save you thousands of dollars. I don’t know about you, but I’m working hard to build my net worth. I would hate to see all that scrimping and saving be for naught because my neighbor left her curling iron on and started a fire that destroyed not only her stuff, but mine as well.

While it’s always a good idea to shop around when looking for any type of insurance, be aware that renter’s insurance costs don’t vary as wildly as, say, car insurance costs do. The most important thing to look for when purchasing renter’s insurance is what’s covered. Be sure that your policy protects you against losses due to theft, natural disasters, and other types of catastrophic events, like fires. A good policy also limits your liability if a visitor is injured in your rental.

So if you’re one of the 60% of renters who doesn’t carry renter’s insurance, it’s time to take a look at your budget and see what you can trim to make room for a small monthly commitment to protecting your valuables. After all, you never know when a freak storm like Sandy could turn your world – and, if you’re not careful, your finances – upside down.